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Consent Order

Consent Order Blue Water Mortgage Corporation

Date: 02/03/2011
Organization: Division of Banks
Docket Number: 2010-377
Location: Hampton, NH

COMMONWEALTH OF MASSACHUSETTS

Suffolk, SS.

COMMISSIONER OF BANKS
MORTGAGE BROKER
LICENSING

Docket No. 2010-377

CONSENT ORDER                 ( Terminated on September 17, 2013)

In the Matter of
BLUE WATER MORTGAGE CORPORATION
Hampton, New Hampshire
Mortgage Broker License No. MB2616


 

WHEREAS, BLUE WATER MORTGAGE CORPORATION, Hampton, New Hampshire ("Blue Water Mortgage" or the "Corporation"), a licensed mortgage broker under Massachusetts General Laws chapter 255E, section 2, has entered into a STIPULATION AND CONSENT TO THE ISSUANCE OF A CONSENT ORDER ("Consent Agreement") with representatives of the Division of Banks ("Division") dated February 3, 2011, whereby, solely for the purpose of settling this matter, and without admitting any allegations or implications of fact or the existence of any violation of state or federal laws and regulations governing the conduct and operation of a mortgage broker, Blue Water Mortgage agrees to the issuance of this CONSENT ORDER ("Consent Order") by the Commissioner of Banks ("Commissioner");

WHEREAS, as a result of the findings from the examination/inspection conducted by the Division of Banks ("Division") as of April 8, 2008, Blue Water Mortgage and the Commissioner entered into a Memorandum of Understanding (the "2008 Memorandum");

WHEREAS, an examination/inspection of Blue Water Mortgage was conducted pursuant to General Laws chapter 255E, section 8, as of April 30, 2010 to assess the Corporation's level of compliance with applicable Massachusetts statutes and the Division's regulations governing the conduct of those engaged in the business of a mortgage broker in the Commonwealth;

WHEREAS, the Division issued a Report of Examination/Inspection (the "Report") detailing the findings of the 2010 examination/inspection;

WHEREAS, the Division has considered the findings presented in the Report and has determined that the Corporation is not in full compliance with the provisions of the 2008 Memorandum. Moreover, the Report disclosed other deficiencies, unsatisfactory conditions and violations of applicable laws and regulations governing the business of a mortgage broker;

WHEREAS, the parties now seek to resolve by mutual agreement, the matters identified in the Report; and

WHEREAS, by mutual agreement of the Corporation and the Division, the 2008 Memorandum is hereby superseded by this Consent Order.

ORDER

NOW COME the parties in the above-captioned matter, the Division and Blue Water Mortgage, and stipulate and agree as follows:

1. Blue Water Mortgage shall cease conducting business with any individuals who engage in the activities of a Mortgage Loan Originator, as that term is defined under Massachusetts General Laws chapter 255F, section 1, regarding residential property located in Massachusetts, who are not duly licensed as a mortgage loan originator under M.G.L. chapter 255F and properly sponsored by Blue Water Mortgage through the Nationwide Mortgage Licensing System (NMLS).

(a) Blue Water Mortgage shall establish, implement and maintain procedures to ensure that all mortgage loan originators with whom the Corporation conducts business are properly licensed as mortgage loan originators under Massachusetts General Laws chapter 255F, and properly sponsored through the Nationwide Mortgage Licensing System by the Corporation.

(b) Blue Water Mortgage agrees to pay ten thousand dollars ($10,000.00) in satisfaction of an agreed upon administrative penalty collected in consideration of the Corporation's conducting business with mortgage loan originators who did not hold an active Massachusetts mortgage loan originator license or who were not properly sponsored by the Corporation. Blue Water Mortgage shall remit payment in full of the amount indicated above, payable to the "Commonwealth of Massachusetts," with the executed copy of the Consent Agreement, to the Office of the Commissioner of Banks, Attn: Mortgage Broker Examination Unit, 1000 Washington Street, 10th Floor, Boston, Massachusetts 02118.

2. Blue Water Mortgage shall establish, implement, and maintain procedures to ensure that the Corporation refrains from providing consumers with any disclosure which, pursuant to the applicable statute, regulation, or regulatory bulletin, is intended to be issued exclusively by the lender or creditor in the residential mortgage loan transaction.

(a) The provisions of this Section of the Agreement shall necessarily prohibit Blue Water Mortgage from issuing pre-approval letters.

(b) Procedures implemented pursuant to this Section of the Agreement shall ensure that Blue Water Mortgage ceases from making any representation or statement that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Corporation, a licensed mortgage broker, is approving or funding the loan.

3. Blue Water Mortgage shall establish, implement, and maintain procedures to ensure that all consumers receive a loan origination and compensation agreement in accordance with the provisions of the Division's regulation 209 CMR 42.16. For each consumer loan file, a completed copy of the loan origination and compensation agreement shall be retained in the Corporation's books and records, as provided in 209 CMR 42.09(1)(b).

4. Blue Water Mortgage shall establish, implement and maintain procedures to ensure that the Corporation maintains and uses all loan documents in the Corporation's books and records in a manner sufficient to evidence compliance with applicable state and federal statutes and regulations, in accordance with the record keeping requirements specified by the Division's regulations 209 CMR 42.09 and 209 CMR 48.03. Such procedures shall necessarily ensure that all disclosures are properly dated and that the Corporation retains evidence sufficient to allow the Commissioner to determine whether time-sensitive documents are being provided to consumers within the mandated timing requirements.

5. Blue Water Mortgage shall revise its "Borrower's Certification and Authorization" form to eliminate any representations or statements that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Corporation, a licensed mortgage broker, is approving or funding the loan.

6. Blue Water Mortgage shall review and revise the Corporation's website to eliminate any representations or statements that could be considered false, misleading, or have the tendency to be misleading, including, but not limited to, any representation that the Corporation, a licensed mortgage broker, is approving or funding the loan.

7. Blue Water Mortgage shall review and revise as necessary the Corporation's website to ensure that, where applicable, the additional disclosures required under the Division's regulation 209 CMR 42.12A(4) and 209 CMR 32.24(4) are included.

8. Blue Water Mortgage shall comply with all laws and regulations applicable to its conducting the business of a mortgage broker, including, but not limited to, Massachusetts General Laws chapters 255E and 255F, and the Division's regulations 209 CMR 41.00 et seq. and 209 CMR 42.00 et seq. Such obligations shall necessarily include the duty to address and correct, within twenty (20) days of receipt of the Report, all violations and areas of concern addressed in the Report.

(a) Within twenty (20) days of Blue Water Mortgage's receipt of the Report, the Corporation shall submit to the Commissioner a written response that addresses each of the violations and areas of concern specified in the Report. The written response shall describe the revised policies and procedures adopted by Blue Water Mortgage to implement all corrective actions set forth in: (i) the "Examiner's Comments and Conclusions" section of the Report and (ii) the provisions of this Consent Order.

(b) Within thirty days of the effective date of this Consent Order, Blue Water Mortgage shall establish, implement, and maintain quality control standards which provide for a loan review process to assess the Corporation's compliance with: (i) the statutes, rules, regulations, regulatory bulletins, and other relevant provisions of law applicable to those engaged in the business of a mortgage broker in Massachusetts, and (ii) the provisions of this Consent Order; and

(c) Blue Water Mortgage shall establish, implement, and maintain procedures and policies to ensure that all applicable staff persons receive adequate instruction and ongoing, periodic training to ensure proper implementation and execution of the revised practices and procedures implemented pursuant to this Consent Order.

9. On the thirtieth day after the end of each calendar quarter following the date of this Consent Order, Blue Water Mortgage shall furnish written progress reports to the Division, which shall address and include the following:

(a) A description of the form, content, and manner of any actions taken to address each Section of this Consent Order and the results thereof; and

(b) Written findings prepared by Blue Water Mortgage detailing a review of management's and staff persons' adherence to the policies, programs, and procedures adopted pursuant to this Consent Order and to applicable statutes, regulations, and rules, as well as a description of any operational changes implemented during such quarter which are intended to improve Blue Water Mortgage's compliance condition in Massachusetts, and the results thereof.

10. The reporting requirement to the Division referenced in Section 9 of this Consent Order shall remain in effect and shall not be amended or rescinded without the prior written modification, termination, or suspension of the applicable provision of this Consent Order from the Commissioner.

11. Nothing in this Consent Order shall be construed as permitting Blue Water Mortgage to violate any law, rule, regulation, or regulatory bulletin to which Blue Water Mortgage is subject.

12. In consideration of the foregoing Consent Order, the Division agrees not to pursue formal measures, relative to this matter, to suspend or revoke Blue Water Mortgage's mortgage broker license under Massachusetts General Laws chapter 255E, section 6, while this Consent Order is in effect.

13. Failure to comply with the terms of this Consent Order shall constitute grounds for license suspension and/or revocation, or other formal regulatory actions pursuant to applicable provisions of the General Laws of the Commonwealth of Massachusetts.

14. This Consent Order shall become effective immediately upon the date of its issuance.

15. The provisions of this Consent Order shall remain effective and enforceable except to the extent that, and until such time as, any provisions of this Consent Order shall have been modified, terminated, suspended, or set aside by the Commissioner or upon an order of a court of competent jurisdiction.

16. This Consent Order and the Consent Agreement are the complete documents representing the resolution of this matter. There are no other agreements, promises, representations, or warranties other than those set forth in this Consent Order and the Consent Agreement, which replace and supersede all prior agreements between Blue Water Mortgage and the Commissioner.

 

Dated at Boston, Massachusetts, this 3rd day of February, 2011
 

By: David J. Cotney
Commissioner of Banks

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